I ran into the same thing when I tried to install Premiere Elements 2 on Windows 7 64 bit. Version 2 installed and seem to work for all but that naming the new project.

I took the easy way out for me, that was, installing Premiere Elements 2 on the free Windows XP Mode that comes with Windows 7 64 bit. If you are unfamiliar with it, it is a virtual Windows XP Professional SP3 32 bit. All is well there and no problems.

I have my doubts about using the compatibility mode route in Windows 7 64 bit. I could see it working if you could not import Premiere Elements 2 at all. But for just that one feature of the project name in new project dialog ??? By all is worth trying. It did not work for me.

If you do not have the Windows XP Mode and have no intension of getting it, what you might look into is accepting the name given for the project and then do a Save As and change the name before you start a new project.